By McCall                                             H.B. No. 2543
         Substitute the following for H.B. No. 2543:
         By McCall                                         C.S.H.B. No. 2543
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to settlement of a claim for a tax penalty or interest on
 1-3     a tax.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 111.103, Tax Code, is amended by adding
 1-6     Subsections (b) and (c) to read as follows:
 1-7           (b)  A taxpayer exercises reasonable diligence to comply with
 1-8     the provisions of this title in relation to a tax item when the
 1-9     taxpayer acts in good faith with respect to that item and:
1-10                 (1)  substantial authority for the tax treatment of
1-11     that item by the taxpayer existed at the time the claim is settled;
1-12     or
1-13                 (2)  the taxpayer adequately discloses the relevant
1-14     facts affecting the item's tax treatment in the report or in a
1-15     statement attached to the report and there is a reasonable basis
1-16     for that tax treatment.
1-17           (c)  The terms "substantial authority" and "reasonable basis"
1-18     shall be further defined in rules issued by the comptroller, but
1-19     are intended to be generally consistent with the manner such terms
1-20     have been implemented and interpreted for federal tax purposes.
1-21           SECTION 2.  (a)  This Act takes effect on the first day of
1-22     the first calendar quarter beginning on or after the earliest date
1-23     that it may take effect under Section 39, Article III, Texas
1-24     Constitution, and applies to tax penalty or interest proposed on or
 2-1     after the effective date.
 2-2           (b)  A report filed before the effective date of this Act is
 2-3     governed by the law applicable to the report when the report was
 2-4     filed, and that law is continued in effect for that purpose.
 2-5           SECTION 3.  The importance of this legislation and the
 2-6     crowded condition of the calendars in both houses create an
 2-7     emergency and an imperative public necessity that the
 2-8     constitutional rule requiring bills to be read on three several
 2-9     days in each house be suspended, and this rule is hereby suspended.